In today's high interest rate environment, more investors are looking for safe, short-term investment options to park their cash. Among the most popular options are SGOV and BIL — both ultra-short-term U.S. Treasury bond ETFs.
These ETFs are commonly used by investors seeking stable returns with minimal risk. But which one is better for your portfolio? Let's break down the key differences between SGOV and BIL in terms of fees, performance, strategy, and liquidity.
✅ SGOV vs BIL: Quick Comparison
| Category | SGOV | BIL |
|---|---|---|
| Full Name | iShares 0-3 Month Treasury Bond ETF | SPDR Bloomberg 1-3 Month T-Bill ETF |
| Issuer | BlackRock (iShares) | State Street (SPDR) |
| Inception Date | May 2020 | May 2007 |
| Expense Ratio | 0.05% (lower) | 0.14% |
| Index Tracked | ICE 0-3 Month Treasury Index | Bloomberg 1-3 Month T-Bill Index |
| Average Maturity | ~0.1 year (0–3 months) | ~0.15 year (1–3 months) |
| Assets Under Management | ~$16B | ~$38B |
| Distribution Frequency | Monthly | Monthly |
| Credit Rating | AAA (U.S. Treasury) | AAA (U.S. Treasury) |
| Yield (2024 estimate) | ~5.1–5.3% | ~5.0–5.2% |
๐ Key Differences at a Glance
1. Expense Ratio
SGOV charges an ultra-low fee of 0.05%, significantly lower than BIL’s 0.14%. Over time, this can make a difference, especially with large capital allocations.
2. Investment Strategy
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SGOV holds U.S. Treasury bonds maturing in 0–3 months.
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BIL targets Treasury bills maturing in 1–3 months.
SGOV has a slightly shorter duration, allowing it to react faster to rising interest rates — which may result in slightly better yields during tightening cycles.
3. Liquidity & AUM
BIL has been around since 2007 and boasts higher average trading volume and AUM, making it ideal for institutional or high-frequency traders.
SGOV, launched in 2020, has quickly grown in popularity and size, now offering competitive liquidity.
4. Yield
While both track ultra-short Treasury bills, SGOV has shown slightly higher monthly yields in recent periods, thanks to its focus on the most current (shortest) maturities.
๐ Which ETF Should You Choose?
| If you value... | Consider |
|---|---|
| Lower fees | SGOV |
| Faster interest rate responsiveness | SGOV |
| Long history and trading volume | BIL |
| High liquidity for frequent trading | BIL |
๐ Final Thoughts
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SGOV is ideal for cost-conscious investors who want exposure to the shortest-dated Treasuries.
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BIL is a time-tested ETF with strong liquidity, backed by a reputable issuer.
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Both are excellent choices for low-risk, short-term income and can serve as cash alternatives in your portfolio.
๐ Depending on your strategy and market outlook, either ETF could be a smart, low-risk addition to your holdings.
"This post is intended to introduce the ETF and should not be considered a buy recommendation."
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